Aug. 24 (Bloomberg) -- CME Group Inc., the owner of the
world’s biggest futures exchange, may offer interest-rate
trading in Europe, once the marketplace that it’s developing in
London has established liquidity in currency contracts.

“We want to be a destination with a full suite of products
over time,” Derek Sammann, CME’s senior managing director of
foreign exchange and interest-rate products, said in an
interview in London this week. The intention is for an
“acquisition of net new client business” through the U.K.
unit, broadening the “spread and distribution of the customer
base,” he said.

The new London exchange will compete with Eurex and Liffe,
the largest venues in Europe. NYSE Euronext’s London-based Liffe
offers products including gilts, short-sterling and Euribor
futures, while Frankfurt-based Eurex has contracts on German and
French bonds. The two were blocked from merging by European
Union antitrust regulators in February who said the combination
would stifle competition in derivatives.

Exchanges and brokers including CME are trying to win
business and customers by capitalizing on regulations that may
push over-the-counter products onto electronic systems. The
world’s biggest exchanges, including CME, Intercontinental
Exchange Inc. and Deutsche Boerse, also own their own clearing
houses, which operate central counterparties that stand in the
middle of trades to guarantee they are completed.

‘Home Market’

“Clients say they need home-market regulation, they want
clarity and consistency,” Sammann, who is based in Chicago,
said two days ago. The new exchange, CME Europe, will “reflect
local culture and have nuanced changes in product specifications
and contract size.”

The London-based market will be led by Robert Ray as chief
executive officer. CME Clearing Europe will process its
transactions, and will start handling interest-rate swaps in the
fourth quarter -- before they are traded on the exchange.

CME Europe will start by offering the 56 foreign-exchange
pairs it trades in the U.S., Sammann said. The Chicago-based
company wants to draw more turnover in regional currencies
including the Polish zloty and Czech koruna through Europe, he
said. The plan is to expand the range of products only after
ensuring contracts in the first phase are successful, Sammann
said, declining to define how that would be determined.

“We don’t want to be seen as throwing spaghetti against a
wall,” he said. “We don’t want to say ‘boom here’s everything,
take what you want.’”